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Dropshipping taxation and legal

Discussion in 'Ecommerce Forum' started by Žilvnas Giedraitis, Mar 3, 2018.

  1. Žilvnas Giedraitis

    Žilvnas Giedraitis UKBF Newcomer Free Member

    3 0
    Hello.

    I am a student and I am starting a drop shipping business in the uk. I am an EU resident and live in the uk, thus I want to sell in the Uk.

    I have a few questions about taxiont and legal things.

    First of all, what taxation would apply to this kind of business.

    Secondly, do I have to register a company like a LLC or a Ltd?

    Finally, there are going to be two people envolved. Does that make a difference in what kind of company I have to open, if have to open it in the first place.

    Thank you. Looking forward in your responses.

    Best regards,
    Zilvinas Giedraitis.
     
    Posted: Mar 3, 2018 By: Žilvnas Giedraitis Member since: Mar 3, 2018
    #1
  2. Mr D

    Mr D UKBF Legend Free Member

    10,569 1,109
    Firstly, the taxation that is dependent on what business type you register. Self employed and company are quite different in terms of taxation.

    Secondly no, you do have to register but you don't have to do it as a company.

    Two people would mean its partnership or limited company (unless wanting a different type).

    Self employed the profits are your income and if you have debts they are yours.
    Partnership the profit split you work out between you is then the income of each partner. Doesn't have to be 50/50. Each of you can be chased for all the debt.
    Limited company you would both be shareholders, the profits of the company belong to the company and are not your income. Debts usually belong just to the company, not to the people involved. You can be employed by the company, you or the pair of you can be directors (must have at least one) and your responsibilities are a little different. Many companies pay out share dividends every so often.
     
    Posted: Mar 3, 2018 By: Mr D Member since: Feb 12, 2017
    #2
  3. Žilvnas Giedraitis

    Žilvnas Giedraitis UKBF Newcomer Free Member

    3 0
    But what would be the best choice in term that we may want to expand later? Where can I read more about what taxation applies?
     
    Posted: Mar 3, 2018 By: Žilvnas Giedraitis Member since: Mar 3, 2018
    #3
  4. Mr D

    Mr D UKBF Legend Free Member

    10,569 1,109
    Posted: Mar 3, 2018 By: Mr D Member since: Feb 12, 2017
    #4
  5. Žilvnas Giedraitis

    Žilvnas Giedraitis UKBF Newcomer Free Member

    3 0
    Thabk you!!!
     
    Posted: Mar 3, 2018 By: Žilvnas Giedraitis Member since: Mar 3, 2018
    #5